ECB outlines three models for bringing central bank money onchain

European Central Bank Executive Board member Isabel Schnabel outlined three ways to bring central bank money onchain on Thursday at the Bank of England's Future of Money conference in London. Under the first model, the central bank would issue reserves directly on a programmable platform. Under the second, the ECB would retain its real-time gross settlement system and connect it to distributed ledger technology (DLT) platforms through an interoperability layer. The reserves would not be tokenized under that model, but the systems would be linked by hash. Under the third model, reserves held at the central bank would be tokenized and used to fully back settlement tokens. Schnabel's presentation described those tokens as private claims, not claims issued directly by the central bank. Schnabel said central bank money would remain at the core of settlement under the current two-tier monetary system. Commercial banks would continue providing money and financial services to customers. The proposed structure would place central bank money on DLT infrastructure alongside tokenized securities, deposits and stablecoins. Schnabel said tokenization could make transactions more programmable and atomic, allowing an asset and its payment to transfer together. Tokenized infrastructure could also let financial assets and money interact directly on the same or connected DLT networks. The ECB launched its Pontes project last month to provide tokenized central bank money for DLT-based transactions. Its Appia project is examining a unified ledger, interconnected networks and multiple shared ledgers as architectures for tokenized markets. Lloyds' 10th annual Financial Institutions Sentiment Survey found that 71% of senior decision-makers at the UK's largest financial institutions expect tokenization to reshape financial services. Faster payments and settlement were the biggest potential benefit for 60% of respondents. Collateral and liquidity management followed at 41%. Investment in new and emerging technologies was a growth priority for 77% of respondents, up from 41% in 2025. Lloyds co-head of global markets Rob Hale said tokenization could make financial markets faster, more efficient and more flexible for clients. Hale cited faster settlement, more efficient use of collateral and better movement of liquidity as tangible benefits.